PPP Forgiveness – Deadline
September 23, 2020
Hold On! We understand that Paycheck Protection Program (“PPP”) forgiveness is the foremost topic for small business owners, but we encourage owners not to rush to apply for relief. The Small Business Administration (“SBA”), FAQ -August 4, 2020, Question #3, states that the deadline for submitting forgiveness application is 10 (ten) months after the covered period. The covered period will vary for each business, but after 10 months, the PPP funds officially become a loan. The true deadline to submit the PPP forgiveness application is 10 months after your covered period.
We recommend that business owners consider several factors before submitting their PPP forgiveness application early.
Consideration #1: Congress may extend the covered period
If Congress extends the covered period the application success rate would dramatically increase. Furthermore, if the deadline remains 10 months after the covered period, that provides more time for the business to submit the application with all the required documents.
Consideration #2: Congress may relax forgiveness requirements
Members of Congress have debated whether businesses who received less than $150,000 in PPP funds should have to submit documentation at all. Instead the smallest loans would “self-certify” that they used the funds as intended by “checking a box.”
Consideration #3: More COVID-19 Relief
The final consideration is that a second initiative for PPP funding could be on the way. If a second initiative is approved, some businesses may be paying on the first PPP loan while applying for the second PPP loan. It’s unclear how the SBA would handle a scenario where a business didn’t use all the first funds as intended, but now has applied for second round of funds. It’s a good business decision to use all the time that you have before you apply for PPP forgiveness.
We all have heard the phrase “Patience is a virtue.” When applying for PPP forgiveness Barbee Tax recommends that small business owners are patient. Considering that the covered period may extend beyond 24 weeks, the potential requirement ease, and more COVID-19 relief, it’s an easy business decision.
For questions related to the PPP forgiveness, please feel free to call Barbee Tax at (708) 405-2112.
